Smart electricity consumption trends: what they mean for utilities & consumers

Technology advancements and the transition to renewable energy sources in the utility business are encouraging businesses and consumers to manage their energy footprint and resources more efficiently. A smart electricity management system uses the Internet of Things (IoT) to help track, measure, control, and optimize household electricity consumption.

Consumers are now adopting these systems more than ever to manage new electricity resources at home, like electric vehicles and solar panels, and optimize their usage. Utilities, in contrast, have started to offer these services to end users as a strategy to adapt to changing market dynamics, predict electricity demand, and gain insight into end-user behavior and consumption.

Besides benefiting consumers and utilities, these systems help the energy grid and other utility industry players. For example, steering consumers’ consumption to low-demand hours helps stabilize the grid. This can help utility companies improve their purchasing profile and allow distribution system operators (DSOs) to invest less in new transmission line investments. Most importantly, it will enable households to worry less about their electricity consumption and get different monetary and environmental benefits from smarter electricity consumption.

In this blog, we look at the current and future smart electricity management services and programs to optimize household electricity consumption, what they mean for consumers, and their impact on a utility company when a user uses electricity smarter.

Smart electricity management for spot-price users

Spot-priced electricity contracts have emerged as a versatile option for households seeking cost-effective electricity contracts. In the Nordics, the popularity of spot price contracts acts as the baseline for many utility businesses. For instance, in Sweden over 50% of electricity contracts are flexible. One of Norway's most prominent electricity companies has 96% of customers with spot price contracts. Finland is also shifting more towards this contract type. In 2022 the share of spot-priced electricity contracts in Finland was 14 percent, while the corresponding figure a year earlier was 9 percent.

These contracts, linked to the hourly spot prices, allow households to benefit from the increased volatility in the energy market. However, households will need new ways to utilize these low-demand hours to maximize their spot-price contract automatically. While many consumers have gotten used to manually monitoring electricity prices and scheduling their consumption to the cheapest hours, utilities should bank on this opportunity to show users how effortless it can be to use a smart electricity service and how it can improve their quality of life at home.

Spot-optimized consumption for electric vehicles and heating and cooling systems

Spot-priced users, particularly those with electric vehicles (EVs) and heating and cooling systems, can unlock substantial advantages through smart electricity management strategies such as spot-optimized charging.

Smart electricity management systems, equipped with real-time data analysis and forecasting capabilities, enable spot-priced users to schedule EV charging during off-peak hours when electricity prices are at their lowest. This minimizes operational costs and alleviates strain on the grid during peak demand periods.

Similarly, by optimizing heating & cooling devices, such as heat pumps, thermostats, or panel heaters, to follow the energy market fluctuations, households can lower their electricity costs without compromising comfort within the home.

Optimized self-consumption for household solar production

Consumers should be using automated tools to increase solar self-consumption. Today, they mostly do manual work to enhance solar self-consumption, such as using the pre-built-in timers on devices, checking the weather forecast, and avoiding EV charging during non-sun hours.

Regardless of the electricity contract, everyone would benefit from fully utilizing solar production. If consumers optimize most of their consumption at sunny hours, households can reduce costs as they don’t have to pay transmission fees or production taxes. Utilities can help users do it by offering services that enhance self-consumption.

Naturally, selling electricity back to the grid when prices are very high makes sense from the viewpoint of a household that has installed solar panels in their home. This can be enabled to the end-user by, for example, setting a price cap that, after the user, would reduce consumption and sell most of the own produced electricity.

Incentive programs for smart electricity users

To make smart electricity management programs comprehensive, it is essential to remember fixed-priced users. By creating, for example, flexibility programs for them, utility companies can generate a lot of savings through smarter consumption of electricity, and it is an excellent way for households to optimize their consumption to cheap hours and also get a discount from their smarter consumption habits. Using electricity when it’s ideal from the utility company’s perspective can create a win-win situation for both households and utilities.

Offering smart electricity management for your users is easy with Synergi

At Synergi, we want to help everyone use electricity when it’s smart. We are already enabling thousands of users in Finland to do it with different distributed energy resources (DERs) and utility companies who want to offer to their end customers.